The Bank of Japan (BOJ) surprised global markets today by raising its key policy rate to 0.75%, its highest level in three decades. The move is a response to persistent inflation, which remains above the 2% target, and steady wage growth across the Japanese economy. Following the announcement, the yield on Japan’s benchmark 10-year government bond surged to 2.015%, its highest point since August 1999. This shift signals a definitive end to the era of ultra-loose monetary policy in the world’s fourth-largest economy.
